The Economist: How can London degree get rid of the capital’s reputation of dirty money?

London – “Arab Jerusalem”:

The Economist magazine wondered why the British capital, London, is such an attraction for dirty foreign money.

While the war in Ukraine has led to some moves against the suspect money, the problem is too deep for some decisions to resolve. For several years, she said, London was flooded with Russian money and lots of it.

Wealthy Russians flocked to the capital for several reasons. Some of them were looking for a stable home for legal wealth, some were trying to take advantage of the tax benefits, and others were looking for ways to launder their money, which they obtained in circumstances that are not considered criminal. not, but remain in the eyes of corrupt. Westerners.

Britain, with its financial position and light financial regulation, was the ideal place to launder contaminated money. The country has found solace in foreign ownership of its important assets, from sports clubs to newspapers.

London has a range of luxury homes suitable for packs of money ready to be laid. It is in addition to an industry that has sprung up around this fortune of lawyers, accountants, bankers and professionals in other fields who have also provided secret and expensive insurance, in addition to important and leading universities and schools, and for this reason the National Crime agency states that Britain has a money laundering problem of up to 100 billion pounds a year.

Successive governments did little to stop the flow of Russian money, but the war in Ukraine led to a sudden change. Britain has imposed sanctions on more than 1,600 people, including 100 rich Russians or oligarchs and their families who became rich under President Vladimir Putin or approached him to preserve their wealth. In March, a bill was passed in parliament that would facilitate the prosecution of international corruption cases, less than three weeks after the entry of Russian forces into Ukraine. The government also abolished the business visa program initiated by Conservative Prime Minister John Major in 1994, which allowed any multi-million pound foreigner to buy accommodation in Britain.

The welcome mat for the Russian oligarchs has been folded. The task of writing off the capital’s nickname “London degree” remains easy and narrow as the task of stopping the flow of dirty money to Britain. Over the past few decades, the country has sought to attract free global capital, not only from the former Soviet Union, but from China, whose citizens make up two-thirds of those who have received investment visas since 2008. British common law, which includes independent courts and strong property rights, remained attractive for money illegally.

“Criminal money tries to get similar protection as clean money,” said Jason Sharman of the University of Cambridge. If you get your fortune by looting, you will be just as determined as anyone else to prevent it from being stolen from you. ” For all this, reducing the flow of dirty money to Britain is a difficult task and requires more action and in four specific areas: the law itself, the behavior of those who practice it, the court system and the laws to enforce the rules. force.

The magazine noted that the corrupt flocked to London because the law gives them secrecy and there is a love for law-abiding donations. Britain was the first country in the Group of Twenty to work in a public register of companies in 2016, but those who provided false details about themselves are not subject to arrest, and if there are penalties, it is not serious not. It is easy to create fictitious and opaque companies and partnerships. In his new book, My Travel to the World, Oliver Polo describes how the Scottish Limited Partnership was popular with people from the former Soviet Union who wanted their money. Britain is still linked to overseas regions such as the British Virgin Islands, whose economic system is based on secrecy, and its prime minister was arrested in a drug operation in the United States some time ago.

An attractive aspect of Britain that does not care about investigation is British defamation law. Britain is still known among foreigners who have a poor relationship with the country and who come with their affairs as “slanderous tourists” because they know their chances of winning are great in Britain. The 2013 defamation law was an attempt to circumvent the imbalance, but smart lawyers “push” the law away from what Parliament intended to achieve, says Carolyn Keen of Wiggin’s law firm. The purpose of the law was to strengthen the interests of the public defense developed by the law, and to increase the protection of writers “who reasonably believe” that what they publish is the truth. Clever lawyers played on these words and used them to tug their opponents. Lawyers have developed their methods of defending the oligarchs and include long and bullying letters against journalists and NGOs investigating their clients to force them to drop the case.

The government has sought to institute reforms and reduce this “legal war”, such as giving judges the right to dismiss dubious cases from the outset, increasing the maximum value of what prosecutors can later obtain, and the defense to strengthen the public interest. Opponents of corruption and lawmakers have demanded to block visas for lawyers working on behalf of the corrupt rich. Law firms such as Carter-Rack and Harpotle & Lewis were forced to issue statements denying that they had acted improperly. Lawyers, however, had a different weapon as they used the Privacy and Information Privacy Act to file defamation cases in which they said the invasion of privacy harmed their clients. In a case brought by two wealthy Russians against HarperCollins Publishing, it was based on this reasoning, and they objected to Catherine Bilton’s book “Putin’s Men”. If law is one area that lawyers exploit, their willingness to do anything for their clients is another.

It paints a picture of the erosion of ethical standards among British jurists, says Robert Barrington of the Center for the Study of Corruption. He said the law usually benefits those who have more resources. But the case was further aggravated by the lure of money to the oligarchs and the corrupt rich, whose cases could fail if they were subjected to a thorough interrogation in court. This situation was exacerbated by a broader trend. Under the partnership model, the client may come first in terms of interest, but the lawyers acted as if they were “court officials” who had committed themselves to serve the legal system. Over the last quarter century, the legal industry has focused on short-term financial performance. Richard Moorhead, of the University of Exeter, says law firms are “in a hurry after a shift towards client-oriented court duties”. Within law firms, there are those who justify his representation of the oligarch by referring to the right of representation embodied in the role of a lawyer defined by the United Nations’ “Basic Principles for the role of a lawyer”, but the different principles clash with others. Clause 14 of the Basic Principles emphasizes the importance of the lawyer’s concern for human rights and to act with caution and caution as required by law, recognized standards and ethics of the legal profession. Lawyers have a choice for those who want to defend it, unlike doctors who are required to give treatment to even the most heinous criminals when he needs health care.

Barrington believes that the choice of lawyers in Britain is important because the legal system is based on the control of the person “One of the good things about our legal system is that it is based on guarantees of conduct and balances, and it is a law the attorneys themselves applied and complied with. Now we see what happens if the law is reversed. ” Anyone who expects to impose restrictions and censorship on the moral slip will be disappointed.

The third part of Britain’s problem is the courts. British judges have a good reputation, but they do not do their due diligence when it comes to large fortunes in foreign jurisdictions that do not respect the law. Sometimes they give credence to poor evidence provided by the external authorities involved in the case. “Judges show a lot of naivety” and “sometimes confidently accept witness testimony, financial documents and other evidence provided by corrupt governments because it is ‘official’,” said a British lawyer.

This is because many oligarchs have relations with officials in this country who can falsify and control the information provided to the courts.

In 2020, the daughter of the President of Kazakhstan, Nursultan Nazarbayev, successfully defied an attempt by the National Crime Agency to confiscate three £ 80 million London homes that the agency allegedly bought with dirty money. An academic study from the University of Exeter published last month found that the judge’s decision was erroneous because he accepted documents and evidence from Kazakhstan that benefited the defendant. The judge did not ask why Badariga Nazarbayev and her son used a complex system of companies in secret shelters abroad.

The British legal system suffers from a lack of transparency, although it is open, it is difficult to know the date and place of the hearings. Court documents are difficult to obtain and expensive. Another problem related to the British court system is its practice of the “cost transfer” system, as the loser pays part or all of the litigation costs, which means that whoever has a lot of money is not a face problem to pay the bill of his opponent. All of this makes the litigation problem very costly because some attorneys may charge high fees by convincing their client that if he wins the case, his opponent will pay the bill. The Supreme Court bill does not deter oligarchs who sue each other in English courts without caring about the costs. The fourth and most important part of Britain’s fight against dirty money is law enforcement. Britain’s total budget for the fight against crime is £ 850 million, according to Spotlight Corporation, a non-governmental organization. A small amount, £ 43 million, goes from the budget to the pursuit of international crime. It is not surprising that between 2016 and 2021, the International Crime Agency was not insured or charged in an international corruption case.

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